The New Retail Landscape

The U.S. election is over and fortunately, I won't burden nmyself with sharing what I believe is in store for the ncountry politically. Regardless of who is president, the nfinancial mess in the USA looms on and in spite of all nthe promises and rhetoric, no bag ofmagic tricks or new nfaces in the White House will quickly fix it.nWhat does this mean to the small retailer?nI can offer complex analysis of the forces and trends at nplay andwho is doing what, but at the end of the day, nevery retailer mustremember the singular outcome of all nof this:nnNo matter what improvements are seemingly made, all burdensnwill rest on the backs of the American Taxpayers.nnThose that are working will have a larger tax load to nservice all thisdebt (thus less disposable income) and nthose that are not working willhave little to spend at all.nOver the long term, the stock market I believe has almost nbottomed outand will make modest gains in the next two to nthree weeks in the wake of the election. The bear market nwill take however at least 4 years by my calculations to nclaw its way back to previous levels. Get used to these nmore accurate valuations of the market.n nHousing prices on average will still go slightly lower nwith bubble regions like California and Florida taking nanother serious hit in the next few months.nThe stock market is bottoming out but the housing market nis still going to experience another slide into the abyss, ndriven by forces that do notaffect the stock market levels ndirectly.nnThe U.S. dollar is currently way over-valued and will ncollapse to lower levels by the end of the year. Why? nSpeculators who have had to pay their bad debts as they nare sequentially called in need to unload all their other ncurrency holdings to buy U.S. dollars and pay them off. nOnce these are settled, only oil futures will artificially nprop the dollar. On that premise nwe have seen 94 cents to the Canadian dollar as an nindicator of future levels. As a side note, the Canadian ndollar is ripe for a serious beating as well because the nnatural resources-driven economy of Canadanwill tank. Demand for their resources drops in a nglobal recession.nnHow does a small retailer make lemonade out of lemons?nnAlthough it doesn't seem apparent right now, what has nhappened willbe good for the small retailer over the nlong run. The market will settleinto fairly valued prices nand more importantly, the cost of housing willnadjust to reasonable values for more people. In actual nfact, once the housing mess settles, more affordable nhousing for the qualified buyer will resurrect the nAmerican Dream and actually fuel retail spending.nIn other words, there will be two families out there nthat can comfortably afford a $240,000 home with money nto spare to spend in your store as opposed to one family nin the same kind of house that paid $400,000 withnnothing down during the mortgage madness era.nNow it's a matter of getting though this storm. nnOver the next few articles, I'll be sharing ideas on nhow to do that. What needs to happen TODAY innyour store is a total focus on PRICE and your nUnique Sales Proposition that I recently wrote about.nPrice, price, price should be your short term mantra nto get through this. Offer a stellar shopping experience nfor the consumer with little money in her pocket and nyou'll keep sales flowing. Get through the storm, therenwill be better days ahead, especially once house prices nhave descended from insane early-2008 levels.nnOne last point - whether you are a Canadian or nAmerican retailer or any retailer that has American funds, nbuy retail stock for your store now while the dollar is nartificially propped up. The dollar has greater buyingnpower, especially for offshore goods at this time. nBuy and stockpile if you can. nnIn upcoming articles, I'll talk about how to use the nsupply chain to your advantage as a retailer and where nthe price of oil is going. Many are predicting a cheap n$2.20 U.S. gallon of gas at the end of the year. nThat will be short lived. Fuel prices will skyrocket nin 2009 and you should plan for it. I'll tell you why nin my next article. One retailer in the building supply nbusiness that I spoke to about this, has just installed na large woodstove in his store and will stop heating nwith oil immediately. He's lucky enough to own somenacres of bush behind his shop and can get free wood. nThere nothing like a crackling fire that costs you nnothing but a little labor.nnnTAKE ACTION TODAYnn1) Review my article on your Unique Sales Proposition. nMake yours the best on the market and eclipse your ncompetition.nn2) Focus on price. Customers will have very tight pockets nat least until 2010.nExamine your average price points and adjust your product nline down over the next 3 months. Position your store to nbe price driven in 2009.nn3) House related spending will come back in 2009 as nqualified buyers start to buy homes at reasonable and nfair prices again. Be prepared with price drivennproduct lines for them. The rate of growth will of ncourse be tempered by unemployment rates.n4) Start preparing for radical changes to your operations nin regards to energy consumption. I'll talk about what you ncan do, even if you are in an urban location soon.nnHANG IN THERE!n